QUO VADIS HIBERNIA ? 1604 LXXXVII

QOU VADIS HIBERNIA ?

It WAS the Economy, Stupid – but the Micro and not the Macro. Ireland Inc. may be doing very nicely, thank you, our putative growth rate may be the highest in Europe and our circumstances dramatically better than five years ago, but very little of this cut ice with the Irish voters on February 27. Like its predecessor the Government was unceremoniously dumped, though this time without any obvious successor.

In fact its goose was cooked two years ago. The Local Election results in May 2014 mirrored almost exactly what happened last February, suggesting that three years was all the electorate needed to pass judgement. This after seeing off the Troika and and receiving concessions on interest rates payable on our debts and on the promissory notes early on. The perception in official circles may have been that the worst was over, but for the ordinary punter austerity was biting and the cuts causing outrage. I wrote at the time (“Mugged by Reality”) that the hiding the Government parties suffered rendered their chances of recovery slight – regardless of any new policy initiatives.

So it proved. We now have a stalemate with very few options. With the magic number eighty, the only viable majority government would be between Fine Gael (50) and Fianna Fail (44). There is historical baggage certainly, but, failing such a coalition, were all other attempts and permutations unsuccessful, including minority administrations by either, another election would beckon. Whether either party has the stomach for one so soon is unclear, but as I write there is little indication of the big two entering negotiations on a “Grand Coalition.”

Right now Fine Gael is seeking to negotiate some type of rainbow- style arrangement involving the minor parties (5 seats) and the 19 assorted independents. Sinn Fein (23) and the ten Leftists have painted themselves out of any coalition while Labour (down to 7 seats) is still shell-shocked. While there are Cabinet seats and Junior Ministries on offer the prospect of a stable administration emerging seems fanciful. Whatever about Independents being loath to precipitate another election, any divisive vote could bring the government down. The cautionary tale of the fall of the first Fitzgerald administration in 1982 when an independent withdrew vital support over a budget proposal to tax children’s shoes has not been forgotten . April promises to be particularly interesting .

The election post mortems have taken place. Much has been made – particularly on the Left ( 5.5% of the vote) and from Sinn Fein ( 13.8%) – of the fact that the two major parties for the first time saw their combined vote fall below 50% . Yet with less than one fifth of the votes cast going to these self-described parties of the Left – about what Labour polled in 2011 – and with many of the Independents rooted in the gene pools of the major Parties, rumours of their demise seem premature.

Fine Gael and Labour have both polled lower and Fianna Fail – long the dominant force in Irish politics – have bounced back appreciably since 2011. There is clearly considerable disenchantment currently with the traditional parties, but the big two have traditionally been coalitions across class and social divide and have also had the ability to absorb whatever small splinter groups to have emerged, while Labour has its own particular niche.

Cue the recent election. Fine Gael’s failings included political naivete, hubris, the wrong priorities, failure to empathize with public sensitivities, perceived indifference to issues such as homelessness and crime. There was general dissatisfaction with the health service, other legacy issues from the crash including the hangover from years of austerity and the palpable reality that most people – particularly the squeezed middle – are worse off now than eight years ago. To cap it all Fine Gael ran a woefully inept campaign – virtually the worst I can remember in half a century and equalled only by Fianna Fail’s 2011 fiasco.

For Labour, some or all of the above, plus guilt by association with Fine Gael. Its strongest card, that it preserved much of the core welfare payments intact, was undermined by clever, focussed and continued sniping from the left over broken election “promises.” Labour was never able to shrug off this charge even though the sniping was obviously politically motivated and so disingenuous in view of the country’s dire economic situation that only die hards on the anti –Labour left could parrot the “broken promises” line with a straight face. It had moreover oversold itself during the 2011 campaign with Gilmore’s fatuous “ Labour’s way or Frankfurt’s way “ remark and was on the back foot virtually from the off on that account.

In many ways it was the Crash Election Part Two , and, as in 2011, the incumbents paid the price. It was never going to be easy governing after 2011, but the Coalition did have several factors going for it. It had been gifted office. It enjoyed an extended honeymoon period in which all the blame could be lumped conveniently on Fianna Fail and/or the Troika. Most of the heavy lifting in terms of savage budgets had been done by Fianna Fail. Even the Troika budgetary targets could be passed off as force majeure.

That left the small print. Adherence to the Troika programme and targets promised a rapid economic recovery, which is now well under way at the macro level. But it involved increased and new taxation and cuts in spending. The taxes weren’t popular – the Universal Social Charge and the property tax in particular – against a background of public disgruntlement over bailing out the banks and not burning-the- bondholders. But they were accepted, given the general public recognition of the need to bridge the gap between government income and expenditure. The spending cuts were more controversial and proved critical.

In effect the Troika suggested the figures but not the details, which were left to the government . It was an opportunity. Sensitivity and political acumen – “cop on” – were needed. Neither were forthcoming. The cuts, particularly in Health, were ham-fisted, indicating a government woefully out of touch. Many discretionary medical cards were challenged or discontinued while vital home help and carers programmes were among those cut back. The mantra that cuts should be universal (why?) rang hollow against the simultaneous protection of sacred cows like Old Age Pensions, and Child Benefit (pruned slightly, but not taxed or means tested). And elsewhere the government showed itself no better than its predecessor.

There was still a chance had the lessons of 2014 been absorbed. But the sole strategy adopted was to plough on, lecturing on the need for stability to sustain the recovery which not all felt, while tinkering with taxation and benefits, Meanwhile issues of public concern (homelessness, crime and sick people on hospital trolleys) were ignored. Irish Water capped it all, becoming a lightning rod for public discontent. Water charges were an austerity too far, the institution itself perceived as an overpriced, overmanned new quango. The charges issue could have been solved – and buried – with some tactical thinking and minor adjustments in revenue elsewhere. Instead it became one of the issues which buried the government. Bon Chance!

20/3/16

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